May 29 (Bloomberg) -- Singapore Post Ltd. jumped to a
record after Alibaba Group Holding Ltd., China’s biggest e-commerce company, agreed to buy a 10 percent stake in the
company to develop its logistics in Southeast Asia.

SingPost shares climbed 11 percent to S$1.72 as of 9:16
a.m. in Singapore trading, set for its highest close since it
went public in 2003. Alibaba will spend S$312.5 million ($249
million) acquiring about 220 million new and existing shares and
the companies will enter talks for an e-commerce logistics
venture, the Singapore-based company said in a statement.

“There’s definitely synergies between the two companies,”
Andrea Isabel, an analyst at UOB-Kay Hian Holdings Ltd. in
Singapore, said by phone. “Alibaba doesn’t have their in-house
logistics and the partnership will definitely help them. The
deal will help SingPost build their presence in China.”

The purchase price of S$1.42 a share is 8.4 percent lower
than the close on May 27. The investment connects SingPost to
billionaire Jack Ma as he expands Alibaba’s logistics to build a
bigger network for shipping goods sold on its platforms as it
heads toward an IPO that may be bigger than Facebook Inc.

Yesterday’s deal will make the Hangzhou, China-based
company the second-largest investor in Singapore’s former state-owned mail service after Singapore Telecommunications Ltd.,
SingPost Chief Executive Officer Wolfgang Baier said.

Singapore Telecommunications or SingTel’s stake in SingPost
will drop to about 23 percent from 26 percent, Baier said on a
conference call with reporters yesterday.

Alibaba Investments

In March, Alibaba agreed to invest about $692 million in
Intime Retail Group Co., owner of department stores and
supermarkets in China. In December, the company agreed to spend
HK$2.82 billion ($364 million) on home-appliance maker Haier
Electronics Group Co. and its logistics business.

SingPost’s sales from e-commerce business accounted for 26
percent of its revenue and that figure is expected to increase
further, Baier said, declining to provide figures.

SingPost shares have risen 31 percent this year, compared
with the 3.7 percent gain in the Singapore benchmark Straits
Times Index.

Alibaba this month filed for an IPO. The company’s market
value is estimated at $168 billion according to analyst
estimates, bigger than 95 percent of the Standard & Poor’s 500
Index. The company is looking to sell about a 12 percent stake,
people familiar with the matter have said, which would make the
offer around $20 billion based on the estimated value and
eclipse the IPOs of Facebook and Visa Inc.

Ma, the founder of Alibaba, has a net worth valued at $12.6
billion, according to the Bloomberg Billionaires Index, making
him the third-richest person in China.